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Business Confidence in Negative Territory, Says ICAEW

The latest business confidence survey from the Institute of Chartered Accountants in England and Wales (ICAEW) shows a continuing weakness in business confidence post Brexit right across almost all of the UK and affecting most business sectors. It is the first time that business confidence has moved into negative territory for four years and the loss of confidence is most evident in property-related sectors and the transport and storage sector.

The ICAEW stated that ‘the subsequent dramatic fall in business confidence was expected’ and the report cites a lack of contingency planning for the Brexit vote.

Profitability is expected to come under pressure as input prices rise with selling prices remaining flat.

More than half of firms are working below capacity – a figure that increases to 75 per cent for manufacturing businesses – the worst figure since 2009.

Against that backdrop, a modest growth in employment is expected while wage inflation is expected to fall to around 1.7 per cent from the 2 per cent level seen in 2014.